Investors back in action but financing still an obstacle for some

Long-term institutional investors are buying property again and looking to conclude further deals, the majority of participants in the opening panel at this year's EXPO REAL declared on Monday. CEO Olivier Piani of Allianz Real Estate said the insurance giant is looking to increase its real estate allocation, currently at about 4%, and is working on a deal to acquire a Paris office property.

For Piani and other long-term institutional investors the fact that prices may continue to fall is not as significant as the buying opportunity the current market situation has provided. Allianz, Piani said, was also looking at jumping into the property lending market. ‘We want to buy real estate risk and are studying whether or not to lend,’ he said.

Albert Behler, president & CEO of New York-based Paramount Group, agreed that now is a good moment to buy if you have financing, can find quality product and have a long-term perspective. ‘If you have access to liquidity it’s an opportunity for the next 10 to 20 years,’ he said.

Getting financing is a major obstacle for those investors who do not have the kind of liquidity that comes with being part of a major insurance company. ‘The banks are still not there,’ said Arnold de Haan, principal and vice-chairman at Meyer Bergman in London. ‘We need the banking industry to come back and support us.’ As an opportunistic fund Meyer Bergman capped its strategy of investing in Central and Eastern Europe (CEE) last year with the purchase of the Aladdin Shopping Center in Kiev. That strategy has now changed significantly, De Haan said. ‘When we started we looked at CEE because that’s where we could make our returns. Now we are only looking at Western Europe, looking at Class A properties that we are buying at opportunistic prices.’